NDTV sues TAM: Why is the media industry quiet?

August 10, 2012

It’s time for big-budget advertisers to start asking a few questions before shareholders begin to ask tough questions.

Sucheta Dalal

Many leaders of the corporate and advertising world have reacted to NDTV’s decision to sue TAM (Television Audience Monitoring) India in the US with scepticism and sarcasm. “Clearly a desperate act by desperate investors of NDTV who have lost big,” said the former head of a US multinational in India. “Their problem is not TAM but Arnab Goswami,” was another reaction and a fund manager said, “Now that they have run out of investors to buy their equity, they hope to get a billion dollars or less from TAM.” But a quick reading of NDTV’s lawsuit, which is available online, shows that it has a point.

NDTV’s lawsuit, in a nutshell, is that executives of TAM manipulate viewership numbers in favour of those who pay bribes. The advertising industry and the corporate world rely only on TAM to decide how to spend their advertising bucks. NDTV has been complaining about the ratings from 2004 and has even conducted a sting operation to prove its charge that viewership ratings, the currency to decide advertising spends, can be fixed. NDTV tried to get other media houses to join the cause, with no success. It then took up the issue with TAM’s and Nielsen’s global management and its biggest ace in the litigation is that it made a presentation to Robert Messemer, Nielsen’s security chief, who not only admitted to a ‘high level’ of corruption, but allegedly said that he had “never seen corruption at that level as he has seen in India.” Will it fly with the New York City court? It remains to be seen. The advertising industry, which is watching the case with interest, thinks that TAM will first challenge the jurisdiction, but what happens if NDTV successfully clears that hurdle? Speculation is that TAM will seek a settlement at that point. TAM India’s (a 50:50 joint venture between Kantar Media and Nielsen) stock response to media queries is that it “doesn't comment on any litigation.” The bigger issue is why hasn’t rest of the industry supported NDTV, if its evidence was clinching? After all, if everybody fixed the ratings, wouldn’t it still be a level playing field? Maybe it’s time for big-budget advertisers to start asking a few questions before shareholders begin to ask tough questions.